Xbox revenue falls again: hardware down 14 per cent, content and services down 2 per cent
Microsoft's gaming division shrank for the fourth quarter in a row, though the decline was much smaller than last time. Consoles continue to sell poorly.
Symbolic image · Photo: Kyu3a / Wikimedia Commons, CC BY-SA 4.0 (cropped and resized)
Microsoft reported results for the first quarter of fiscal year 2027 (July to September 2026) on 28 October. Xbox content and services revenue – covering first- and third-party games, add-on content, cloud gaming, advertising and Game Pass – fell 2 per cent year on year, or 1 per cent in constant currency. According to Inven Global, it is the fourth decline in a row, but far smaller than the 10 per cent drop in the previous quarter.
Xbox hardware revenue fell 14 per cent on lower console sales, according to Simulation Daily, which puts total Xbox revenue at around 5.38 billion dollars, down 2 per cent on a year earlier. The main drags were lower revenue from third-party games and Game Pass, while first-party content grew. CFO Amy Hood had previously guided for a decline in the mid-single digits.
Xbox now sits within the restructured Devices and Consumer segment, whose revenue fell 3 per cent to 15.5 billion dollars. The company as a whole, by contrast, grew revenue by 19 per cent to 92.3 billion dollars, driven by cloud. According to Inven Global, Xbox CEO Asha Sharma is focusing on profitability, and Microsoft aims to return to growth this fiscal year.